Ernst & Young: Argentina – New Government Measures to Improve and Strengthen Employment
Argentine payroll costs are the highest in Latin America, standing at a maximum of 40%. Social security and health care employer contributions amount to 23% or 27%, based on each employer, whereas contributions withheld from employees stand at 17%. In addition, the cost of work-related accident insurance coverage and mandatory life insurance must be added and amount to an additional average of 4%.
Moreover, Argentine Employment Contract Law and collective bargaining agreements also establish other type of costs that employers must bear, such as 13th payment, paid holidays, non-wage payments, uniforms, food, medical controls, and dining facilities, amongst others.
This situation, jointly with the high inflation that Argentina has suffered in the last few years, make companies’ labour and payroll taxes a significant component of their cost structure.
In order to boost the labour market and improve the country’s infrastructure, thus facilitating the production of goods and services, during its 14 months in office the new government made decisions and implemented policies in several areas, such as finance, employment, and taxes.
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